Docs Layman's Chatter: April 2013

Saturday, 27 April 2013

Global Petroleum (GBP:Ln)

Global Petroleum

Where is the value in the market? How about a company trading at a discount to net cash let alone Net Asset Value. Let me introduce you to Global Petroleum (GBP) which at 6.75p is capitalised at £13.46 million but has net cash of £14.8 million and net assets of £21.8 million. Shurely shome mishtake? No. - See more at: http://www.shareprophets.com/ (Register free for fundamental and Technical Tips from Our team of writers includes Zak Mir, Steve Moore, Lucian Miers, Robert Sutherland Smith, Brokerman Dan, Tom Winnifrith, Aubrey Brocklebank, Doc Holliday and Alpesh Patel)

http://www.shareprophets.com/analysis/155/buy-global-petroleum-at-675p

Doc Holiday can be followed on Twitter at Doc_Holiday and writes on resource stocks at www.docslaymanschatter.blogspot.com

Thursday, 25 April 2013

Thoughts on a few companies...(IAE,MML,AQP,DXNS)

Rebound In the Precious Metals And Retail With Undervalued Energy Producer

Well after whats been a much more positive week in Gold and Platinum particularly rebounding of the biggest drop since the 80's things seem a whole lot brighter, But wait its Friday tomorrow with the caution to risk as prudent as ever.

Closely Indexed to the gold price and with excellent margins Medusa Mining (MML) really are not such a great risk in regards to producing gold and with profitable margin as they are economical and competitive in there recovery cost.

Aquarius platinum retrace back to similar levels of late 2012 when I covered the company at 36p. Yesterday I posted the 1st tranche BUY at sub 40p (39.5p) However 47.25p looks possible I'm not fully subscribed to 55p although with leading indicators proving the call I think Friday will dictate AQP trajectory to 41.75p or 55p.... That is not to say one or the other it is merely a plumed depth in SP and the TA should confirm which directive Aquarius head.

Dixons, Dixons, Dixons well the company announce further good news as the stock runs 15p-27p-37p well here it is folks, Yes its great news that Dick are getting their shit together but the reality is news has to be factored in and profits are always taken. Even in the rising trend a short positioned pull back at 37-38p would offer another sniff at 33.5p with some dreaded dick action sub 30p. Does Dixons have the minerals to offer as much topside as bottom today?

Ithaca Energy have like many Oil&Gas stocks suffered at the hands of an agitated market and investor base, Reality is Ithaca IAE have a credible platform and foundation accompanied by value through its revenue stream, The dreaded and often unreliable brokers report £2 Buy TP however between the wheat and the chaff Ithaca Energy should they continue to progress could be swimming in upside and greenbacks. ''so for now around a pound (£1) you could do alot worse ''

A few brief thoughts on a more positive and proactive note...

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Sunday, 21 April 2013

AVOCET MINING PLC

Avocet Mining Plc.

199.11m Shares In Issue

£29.34m Market cap

Trade High 173.50p
Trade Low 14.25p

Avocet has on all accounts become locked into a period of erosion similar to a early 80's Chevrolet Cavalier however I think its fair that my stance to adopt very basic principles whilst looking at Avm.

Avocet Mining have come down off great highs to what now appears a extremely modest valuation by the market for what is not a completely flawed model, Yes we know there has been some issue and with recovery around $1600 per oz we could argue where's the value? Quiet simply the value is on the future price of gold and the cyclical trends in mining/natural resource stocks changing.

Recently Avocet announced that they had slowed down:

“Since announcing our reduced reserve, our objective has been to put in place financing

that reduces the burden of Inata’s hedge while ensuring sufficient funds are available
during 2013 to progress our key projects at Tri-K and Souma.
Over the rest of the year we will complete the Tri-K feasibility study and Souma drilling programme,
Avm are confident that by the end of 2013 the Company will have clearly demonstrated the
significant value to be realised from its portfolio of quality assets.”

After listening in to the recent CC. and looking at the hedge restructure there do not appear to be any major issue's other than! (This is where it gets tasty) The company will have some outstanding debt to tune by the time the Q3-4 financial address resurfaces. I'm happy as are Elliot to start backing the horse around the circuit and by Q2-Q3 I anticipate that Avocet will announce a return to increased recovery figures of its ore and for this reason I give a few basic reasons why I see a premium to today's price of 14.5p

Following the hedge restructure, the minimum cash balance required by Macquarie to be
held in SMB has fallen from US$37 million to US$12 million. Subject to this ongoing
minimum balance, the following has been agreed in respect of cash held in SMB:
* up to US$10 million may be spent on Souma exploration, although a payment will
be required to buy back further hedge ounces (a “matching payment”), equal to the
amount by which Souma expenditure exceeds US$5 million. Souma’s exploration
programme budget for the remainder of 2013 is approximately US$9 million;
* once the level of hedged ounces falls below 100,000 ounces, which is currently
scheduled in Q1 2014, the Company will have access to 50% of Inata’s surplus
cash, with a matching payment being required to buy back further hedge ounces;
and
* once the level of hedged ounces falls below 80,000 ounces, which is expected to
occur in mid-2014, the Company will have access to Inata’s surplus cash (cash
above the US$12 million minimum balance) without restrictions; and
* The Company has the option to defer Inata’s remaining US$5 million debt
repayment to Macquarie to any date before 30 September 2013, at an interest rate
of LIBOR plus 10%.

The company are on track to announce an increase in recovery by Q2-3 which will naturally be warmed to by market.

As the continuing silence of Europe's debt ceiling continues we have to accept that the worm will turn over the summer with further advances into gold. (Factoring points are disputes in the middle East,North Korea etc) Coupled with a reduction in the indicies.

Cyclical trend followers will be pointing to a mining uplift again indicating towards the black sheep sector of today for growth tomorrow.

Keep a close eye on Gold's return to $1425 with a conscious focus on sub $1300 as you navigate the arena. Buy into the weakness over multiple tranches #Protect your position

Avocet Intangible value is ten fold which would explain the ten fold value assigned before Avm run into troubled waters, They are not alone yet present a clear strategy.

All the best Doc

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AVM

Monday, 15 April 2013

Disaster In Boston And The Disaster In Gold

Tonight as we sit pondering the gold crash today as the gang bangers run riot on gold we must reflect also on the events filtering in from Boston.

Yet another senseless act in global lunacy. My thoughts are with the innocent families of the fatally injured at a marathon on a public holiday

Over to gold today '' Wow '' -10% wiped off the price with a serious play laid out by the bears. As the panic sets in we must remember that the wall often does not fall so quickly or hard and with this in mind must consider the positions open long and the counters needed to cover such a decline in the gold price.

The Markets are over valued and have been for sometime and sadly with more uncertainty in national security in the days around such events with speculation running rife I'd say that the markets won't warm to such events, Perhaps the catalyst to Cyprus struggling, China slowing and Italy/Ireland/Slovenia adding fuel to the fire that all is not well yet the markets run north... Obviously this had to come to an end and perhaps the fun will end at 1300p for gold as the rebound kicks in in the wake of the biggest drop in 30years for gold.

My thoughts are they can only mask global concerns and the bearish news flow surrounding, which would encourage Gold purchase.

For now the bears continue the story that Golds day is up!!! '' Bollocks '' 1300 likely 1150 possible However watch for the rebound as the good ship FTSE pulls back...

Zak Mir gives analysis here: http://www.shareprophets.com/analysis/37/gold-crushed-by-20-bullion-sell-order-on-comex

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(These are but opinions derived from my own experiences and thoughts and do not adopted as statement of fact)

Thursday, 11 April 2013

ZANAGA IRON ORE

Speculative Buy

Market Cap £48m

Shares in issue 278.777m

As at 30 Jan 13, 72.89% of shares in issue not held in public hands

So only about 75.5m shares in public hands

52 week high 117.25p

52 week low 14.00p

Current SP 17.00p

As at 30 June 2012

Net Assets £144m

Cash £26m (more than half market cap covered by cash)

Cash flow for the year £3m-£5m outflow

http://www.shareprophets.com/analysis/19/zanaga-iron-ore-is-a-speculative-buy-at-17p-argues-doc-holiday

The Zanaga story has been a jaded one after coming to market when natural resource companies were well regarded. Zioc listed at 156p twice subscribed at IPO with a high profile high case value, reporting the largest Iron Ore play in west Africa.

Xstrata tied up the joint venture 50-50 minus one share and assigned $100m to the PFS which has increased dramatically securing the future of the development and forging a relationship which would translate to the JV forecasting delivery of Ore to China at $45 m/t with a $28 m/t recover cost which in real terms exceeds all juniors and majors in their peer group with Zanaga forecasting significant profits in all climates.

The company has 73% of the stock out of public hands with a £26m cash position against the modest £48m marketcap today. The company has assets worth three times the current marketcap with the tangible cash in the bank.

Now lets look at the decline and reasoning to this, Well its no secret the sector has been somewhat unloved along with Xstrata (Ziocs partner) merging with Glencore who are finalising their future with the Chinese government (Announcement pending 2nd May 2013) taking longer than expected. Glencore and the Jv have been subject to speculation questioning glencore's intent on building the Iron Ore business with Zanaga, However what we do know is Xstrata do not have any Iron Ore plays like this and certainly not on this scale.

The stocks hampered with an institutional seller which has clearly effected the share price 40p to 17p. Relief will come when the overhang has cleared and its my understanding that at less than 5% this should not be too much longer.

The facts speak for themselves the company holds approx 60% of the company in cash with £144m in assets supported with a highly profitable business plan then zanaga has to be considered as a eyes on recovery play.

The next month will be key to Zanaga accelerating its developments or further delays in news and with this in mind I advise buying into the distressed weakness with a view to following the merger with disclosure on Xstrata/Glencores future plans and act according.

Best Regards Doc

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Sunday, 7 April 2013

Paternoster Resource

Paternoster Resource News stream and Value

Paternoster have had a variable 12-15 months as they traded at a premium to the Nav with not so much going for it back in early 2012 and now trade at a significant discount with further Investment disclosure and Accounts pending release which will demonstrate a highly profitable and positive Investment/Revenue position and portfolio.

Current disclosed Investments as they stand and the +/- position

Listed

Brady Exploration £161,000 -17%

Quadrise Fuels £218,000 estimate +56%

Plutus Resources £720,000 +260%

Astar Minerals £110,000 -63%

Current undisclosed Investments as they stand

Unlisted

Andiamo Exploration £200,000

Shumba Coal £160,000

Bison Energy £200,000 estimate (Speculated)

Warrants Held

Leed Resources 166,666,667 exercise @ 0.15p

(valued at market value where possible)

The company appointed Nick Lee as Ceo and re-branded the company as a Micro Inv. Fund as the completed an early coup on LDP and taking significant gains in IPSO now Plutus.

Thoughts and figures from December 2012:

http://www.stockopedia.co.uk/content/paternoster-resource-plc-69892/

Updated Jan 2013

http://www.stockopedia.co.uk/content/paternoster-resource-plc-prs-70036/

What is quiet clear is the company have made great leaps forward under the surface after the huge surge in cash profits from the Ldp trade in early 2012. One full year on and we now have around three times more cash with no likely cash calls and a healthy Investment portfolio.

Core Value

TOTAL INVESTMENTS £1,770,000 (Unrealized profit £390,000 +28.1%)

Probably outperforming most indexes and benchmarks

CASH circa £1,300,000 - 1,400,000

TOTAL PORTFOLIO £3,170,000

Shares in issue 577,857,956

Net Value 0.55p

Share Price 0.31p

Discount 44%

Potential Value

When the Unlisted companies list it should provide another significant uplift in the NAV. Also the potential of RTO's for Brady and Plutus could provide further uplift. Should these pieces of the jigzaw fall into place you could expect the Share Price 0.70p+

This is the disclosure we expect will become more transparent which should reveal further gains on listing and reverse take overs. Paternoster hold a clean and jerk cash position protected by a decent cash value yet ready to take any advantage of weakness in further investments as the CEO Identifies potential with whats seems an ease. As QFi languished Nick dropped in and took stock at 7p to add to the impressive Ldp and Plutus scalps.

When we look at the PRS (Paternoster) Peer group it seems that Paternoster are tripping over itself as the Core & Potential value as they have healthy revenue and profits on the book with further coming as the second group are revealed.

Andiamo

Shumba

Bison Energy

As we are seeing today news is filtering out into the public domain from a diverse investment select.

Paternoster Resources are underweight, reiterating a BUY recommendation

http://uk.advfn.com/one-free-share-tip/buy-paternoster-resources-at-0-325p-says-doc-holiday/463

As I review the maverick journal I'd like to add that the technical perspective looks to be maintaining a bullish trend as it has in bulk traded over the 200dsma in 2013 with a golden cross mid Jan 2013.

I expect the worthwhile news over the next week or so.

Outdated article

https://www.blogger.com/blogger.g?blogID=5949246037430591637#editor/target=post;postID=3491745477418533877

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